Are analysts bullish on L&T after robust Q3 order growth?

Even as sluggish orders from power sector continue to worry Larsen & Toubro, its other business segments like hydrocarbons and urban infra will boost order book going ahead, the company's chief financial officer, Shankar Raman told media yesterday.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney master your money IThe Winning Leap SME Special
Moneycontrol

Home » News » Earnings » Result Analysis

Jan 28, 2013, 02.23 PM | Source: Moneycontrol.com

Are analysts bullish on L&T after robust Q3 order growth?

Even as sluggish orders from power sector continue to worry Larsen & Toubro, its other business segments like hydrocarbons and urban infra will boost order book going ahead, the company's chief financial officer, Shankar Raman told media yesterday.

Like this story, share it with millions of investors on M3

Are analysts bullish on L&T after robust Q3 order growth?

Even as sluggish orders from power sector continue to worry Larsen & Toubro, its other business segments like hydrocarbons and urban infra will boost order book going ahead, the company's chief financial officer, Shankar Raman told media yesterday.

Post Your Comments

Share Cancel

Moneycontrol Bureau

Even as sluggish orders from power sector continue to worry Larsen & Toubro , its other business segments like hydrocarbons and urban infra will boost order book going ahead, the company's chief financial officer, R Shankar Raman told media yesterday.

In Q3, which is traditionally a lean quarter for engineering companies in terms of orders, L&T surpassed industry expectation by recording 14% jump in its order book to Rs 1950 crore,YoY on sharp rise in electrical and electronics segment and buildings and urban infra segments.

A major push came from engineering and construction segment which garnered fresh orders of Rs 17818 crore, around 16% up, YoY, of which. Rs 3564 worth orders came from international projects.

Along with L&T management, brokerages too are confident of the company meeting its FY13 order book of around Rs 184,000 crore.

Here is what they have to say

Macquarie stated, since the company has already achieved  over 85% of its order targets, there should not be any problem for it to get remaining orders in Q4, which is the strongest quarter in terms of procuring orders. "The firm needs anything between 0-15% growth to achieve in FY13 order size targets. The company has highlighted strong traction in domestic hydrocarbon segment as expected policy reforms will accelerate growth,"  stated the brokerage. Confident of the company's future growth targets, the firm has maintained 'outperform' on the stock with a target price of Rs 1584.

CLSA has also upgraded the stock to an 'outperform' with a raised target of Rs 1750 after L&T surprised the market on order book growth in Q3.

Read This: See L&T improving margins from current levels: Anand Rathi

However, Jefferies has downgraded the stock from 'buy' to 'hold' with a target of Rs 1800 because it expects revenue growth slowing down due to sluggish execution of projects. The firm also does not see major uptick in margins from current levels. It further explains that despite the company's order book escalating to Rs 60100 crore for nine-month ending period, it is still down 75%, YoY

Morgan Stanley believes despite order book growth, capex is seen drying up due to scheduled elections in FY14. The industry including L&T will witness margin pressure due to intense competition. The firm has revised stock price target to Rs 1585 from Rs 1440 on the back of muted revenues and margins.

Citi has also cut its target price to Rs 1653 from Rs 1732 on higher quantum of slow moving orders. Further, to offest the sluggish environment, the firm is looking at procuring international orders, where margins are at least 100-150 bps lower then what domestic projects offer.

Buy, Hold, Sell ? Hear it first on M3
Are analysts bullish on L&T after robust Q3 order growth?

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login